What is Financial Stress? How to achieve financial well being?

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Financial stress is an issue that most people will experience at some point in their lives. Financial stress is present in today’s society, and it affects many people. Education is supposed to be a way of life that leads to less debt and higher success, but the reality is far away from this. For most people, debt and stress are life-long companions. People are often faced with debt and stress when they go to college. Student loans are a problem because you have to pay them back, and they lead to more debt. Education is supposed to be a way of life that leads to less debt and higher success, but the reality is far away from this. Problems with finance, debts and bills can be eased to a great extent by getting your financial well-being in order. Financial well-being is the answer to debt. A life full of debts, stress and worries is a problem that finance will help to ease. A life full of debt, stress and worries is prevented by financial well-being.

Financial Stress? When we come to a certain age, we start understanding the importance of financial aspects in our lives and how hard it is to earn it in an era that is full of cut-throat competition no matter the sector it is. 

Money helps us to put food on our table and that’s what matters the most. In some cases, we have witnessed the parents working 2-3 jobs so that they can provide 2 meals a day for their children. You can imagine how much of a toll it would take on the individual, both mentally and physically.

For most money invites two things in our life i.e. debt and stress. Let’s talk about the vicious circle of loan here, especially the student loan. The motive behind education is to get a well-paid job to having a humble life. Unfortunately, the reality is far away from this. Once you are out of college not only you have to arrange for your two meals, you have to pay the hefty debt, rent, various bills etc.

There are innumerable issues caused by these debts and bills. Finance is one of the top causes of stress around the world.  So this is how it’s going to be, a life full of debts, stress and worries. Well, financial well-being is the answer to this problem. It will not completely eradicate your debts, but it will ease down your debt as well as stress up to a great extent.


Financial Stress and Poor Health


Financial Stress is not only limited to the debts and bills you have to pay, it has more serious consequences hurting your health. Apart from suffering issues like stress and anxiety in personal life, such individuals face lots of problems in their professional lives as well.

People suffering from financial stress become absent-minded, miss going to work. It becomes hard to finish the task in time, let alone the efficiency and high performance.

Imagine how stressful it is for such employees who are not only working under the pressure of their work but also suffering from various issues. Now some optimum level of pressure and stress does not harm and increase performance level instead, but issues these individuals are facing undermine the other theories to an extent.

In a recent study, it was found that individuals who experience major financial stressors report greater levels of psychological distress and lower levels of psychological well-being.
Source: Psychosomatic Medicine Journal

Here are some of the issues that Financial Stress can cause: 

  1. Anxiety
  2. Depression
  3. Low Self-Esteem
  4. Insomnia
  5. Weight Gain
  6. Reduced Mindfulness

 What is financial well-being?


Financial well-being is having financial security and financial freedom to be able to make monetary decisions in future or present. Apart from that, there are other points as well which defines the ideal financial well-being which is as follows:

  • Able to pay the mortgage or retire comfortably
  • Able to monthly expenses
  • Capacity to absorb financial shock like job loss. That is the person in such a condition should be able to payday to day expenses, bills, debt etc.
  • Meeting the long-term or short-term financial goals. This can include paying off your mortgage or setting up a fund for college and other higher education

Now it’s a relative term i.e. it differs from person to person. Person A has a family and a kid who’s about to go to college and then we have Person B who has just started. There would be different financial decisions that need to be made by two to achieve financial well-being. Person B need not worry about the mortgage or tuition fee for the kid going to college, student loan debt and rent could be the priority in this case.

Steps to achieve Financial-Wellness:


Create a budget:

Spending up your salary like there is no other day is not a great idea. The financial drought we see for ourselves between the month or month-end is caused by no planning. It may doesn’t seem like a big deal, but it is. A budget can help you to become future proof.

Make a list of expenses you did in the past 3 months and list them under two columns namely “essential” and “non-essential”. If you see yourself in a tight corner then try to remove some items from the non-essential list. Else get that salary raise so that you don’t have to compromise much.

It might be possible for you to need to do 2 jobs at the time to meet your expenses and if that’s the case then so be it.  A debt-free and stress-free life will ask for such dedication from you.

Debt Management:

Debt is divided into two segments: Good Debt and Bad debt.

Good Debt: Good debt is a loan that has the potential to increase your net worth.
Bad Debt: Bad debt involves borrowing money to purchase depreciating assets.

Source: Investopedia

For Example, Good debt may include Student loans, mortgage for home etc.  Bad loans may include a loan for a brand new car or bike, video games etc. It’s quite relative too as it might be necessary for you to get a car to travel to your work. The good idea would be to get a car from a second-hand dealer and that too a non-luxury one.

It’s easier to get a loan than to repay it. While taking a loan keep on checking the interest rate. Don’t get into a loop where you’re hardly able to pay the interest and not the principal amount.  Just have a budget, cut on your expenses and make it your priority to clear your debt.


As per Wikipedia Investments means “to invest is to allocate money in the expectation of some benefit in the future.”
Not only will investment help you to meet your essential expenses, but the financial abundance it creates also can cater for your non-essential needs as well. It can be short-term or long-term, long-term may include investing for your retirement.

Now with this, I am not asking you to just go to your bank and opt for a fixed deposit. There are other ways to get a higher return as compared to a bank deposit. You can opt for a SIP (Systematic Investment Plan) or learn stock trading as a side hustle. There is no need to worry as there are Financial Services just there to help you with these.

Emergency Fund:

This is a must-have, you need to set aside money for your rainy days to meet your financial needs. Make sure that you strictly do not touch that fund until and unless you guessed it right “an emergency”.  What if you’re laid off suddenly or a contract is about to end and we are well aware that it’s a common occurrence in the corporate world.

One needs to have at least enough savings for about a minimum of three to six months so that you can not only meet your day to day needs but also be able to pay for your rent, bills, debts etc. Take COVID 19 for example, it shook the whole world. Millions lost their jobs around the world and the situation is not going to be good anytime sooner. This is not a regular occurrence, but remember even in this situation you will have to pay.

We have insurance for our car, home, even nowadays our cell phone can get insured too. At times we give so much thought to materialistic aspects of our life that we forget to take care of ourselves. It’s important to get health insurance, as you never know what will happen next. I am sure we all are aware of how back-breaking these medical expenses are.

Giving a reality check here if possible and when your financial conditions allow. Apart from health insurance options for a term plan. A term plan or term life insurance is
“a life insurance product, which offers financial coverage to the policyholder for a specific period. In case of death of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary.”


Financial well-being is key to a stress-free lifestyle. In the materialistic world, we live in money has the last say and there is no doubt about this. This is a long term process that might take you years, but in the end, it’s all worth it. As it will not only help you in getting stable financially, it will prevent various health issues like anxiety, depression, eating disorders etc. 

Also Read: Amazing Things You Should Know About Leadership Excellence

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